Estates

What is an Estate?

An estate is all of the possessions and investments that a person owns at the time they pass away. Examples include vehicles, clothing, jewellery, art, accumulated points (e.g. air miles or grocery points), real estate, cash in the bank, stocks, mutual funds, shares in private companies, and so on.

With a couple of exceptions, contrary to popular belief, anything that a person owns jointly with another person is considered to be part of the deceased person’s estate. The exceptions are, for example, where the deceased person has written a Will which stipulates that jointly held assets are intended to be a gift to the surviving account/asset holder, or where the surviving account/asset holder is the surviving spouse – but this is only a presumption, and not a hard and fast rule! Each situation turns on its own facts and depends upon what the deceased person intended and how well they communicated that intention.

If a person had a Registered Retirement Income Fund or Registered Retirement Savings Plan or a Tax-free Savings Account, where a beneficiary was named, the value of that fund, plan or account is not part of the estate. It goes directly to the beneficiary.

If a person had a policy of life insurance and named a beneficiary, the proceeds of that policy are not part of the estate, unless the beneficiary has already died and no substitute beneficiary was named. If no beneficiary was named or if the estate was named as the beneficiary, then the proceeds are part of the estate.

When a person dies, her or his estate remains available to pay any outstanding bills, taxes, and after those are dealt with, any legacies or bequests named in the person’s Will are paid; if there is no Will, then the balance of the estate is paid to the person’s next of kin. Please read my web page entitled Estate Planning for more information.